NEWSPAPER EXECUTIVES: THE ENEMY IS US

By: Lucia Moses Publishers Speak Frankly At NAA Conference



SAN FRANCISCO - What are the biggest challenges facing the
newspaper industry? If you ask some of the nation's top newspaper
executives, you might expect them to say the Internet, loss of
credibility, or changing reader habits. Surprise: they're pointing the
finger at themselves.



Newspapers are ignoring potential revenue sources, failing to market
themselves, and turning off potential employees with low salaries, said
executives participating in a panel discussion Sunday during the
Newspapers 2000 convention being held here.



'I think we have a very well-deserved image of not paying enough,' said
Alan M. Horton, senior vice president/newspapers at The E.W. Scripps
Co., parent of the Denver Rocky Mountain News.



Orage Quarles III, publisher of The News & Observer in Raleigh,
N.C., echoed him, saying that the paper's parent, The McClatchy Co.,
was forced to look at its pay scale because it was losing people.



Stuart Garner, president and CEO of Thomson Newspapers, complained that
the industry doesn't market itself well enough. Garner, who began
allowing Thomson's publishers to run ads on their front pages, said
other papers are missing revenue opportunities by not doing the same.



'We have a sacred cow called page one where we can't market ourselves
with conviction,' Garner said.



Newspaper companies should also market themselves as information
providers to reflect the increasing non-newspaper holdings of their
parent companies, said Gary L. Watson, president of Gannett Co. Inc.'s
newspaper division. Today's fast-changing world demands that newspapers
be able to adjust quickly to new business models, which they haven't
done in the past, he said.



While consolidation of media ownership has critics predicting fewer
independent voices in journalism, panelists agreed that consolidation
in the industry is not only inevitable, it's good for business.



'Ten years from now, when the [Newspaper Association of America] has
its annual convention in New York, there won't be very many of us,'
pronounced William Dean Singleton, president and CEO of MediaNews Group
Inc., parent of The Denver Post. 'But that's not the end of the
world. Consolidation is not bad.'



'When cross-ownership goes away ... as we learn how to take advantage
of the Internet ... we'll have a better business than we've ever had,'
Horton agreed. However, newspaper companies will have to accept lower
profit margins to stay current with technology, he predicted.



Even St. Petersburg Times Chairman/CEO Andrew Barnes, whose
company prides itself on its independent ownership, argued that getting
bigger isn't necessarily bad, if newspapers stay close to their readers
and advertisers.



Publishers have mitigated the Internet threat by putting their papers
online and buying stakes in Web classified sites. But the threat,
particularly to classified advertising, hasn't disappeared. And
elsewhere, newspapers face challenges in the retail category, their
biggest source of advertising, and fluctuating newsprint costs.



But the executives exuded confidence that the Internet won't replace
local papers as primary sources of credible news and information.



Asked about last year's Staples Center upheaval at the Los Angeles
Times, some of the publishers called it an 'anomaly.' The
Times was widely denounced for agreeing to share profits from a
special magazine issue with the issue's subject.



Barnes disagreed, calling the episode representative of a 'constant,
recurring pattern' in the industry.



But most newspaper companies are run by seasoned publishers who
understand the importance of editorial independence, Singleton said.
And that's part of the industry's strength, he said.



'None of our Internet competitors even comes close to what we have,' he
said. 'All they have is a little bit of venture capital money that's
going to go away very soon. And when it does, we're still going to be
there.'